Find any ONE situation in business performance that are using Present Value Annuity using the online Google. From the situation, you required to answer the questions below.
i. What is the frequency conversion that have been use, and explain it?
In USA, corporates often issue bonds to fund their business where coupons are paid semi-annually. So price of the bond is determined using Present Value Annuity.
As the bonds are semi-annual, the frequency conversion factor is 2. So, rates for the period is half of the nominal annual rate and number of period is doubled.
That is, r = Rannual /2 and t = 2 * number of years
So, price of a bond= Present Value Annuity of coupons with rate r and t periods.
Find any ONE situation in business performance that are using Present Value Annuity using the online...
A perpetuity-due paying 5 every year has a present value of 90. An annuity-immediate paying 10 monthly for 5 years has the same effective rate of interest what is the present value of this annuity? Hint: To calculate the monthly annuity, you should find the present value of a 60 payment annuity using the monthly effective rate of interest that is equivalent to to the annual effective rate of interest that you derived from the perpetuity. That is find i...
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Find an ethical situation that describes one ethical situation. It does not have to be in healthcare. You may use online-newspapers and journals but not blogs.
(1) Find the present value (one period before the first payment) of an annuity- immediate that lasts five years and pays $3,000 at the end of each month, using a nominal interest rate of 3% convertible monthly. Then repeat the problem using an annual effective discount rate of 3%. Which is higher? Why?
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